California Receives Grant to Fight Workers’ Comp Fraud

June 23, 2009

Several counties in Northern California recently received a grant worth nearly $30 million. The money will be used to combat fraud amongst employers. By law, all employers are required to purchase and maintain an insurance policy for workers’ compensation. This covers the medical expenses and lost wages of any employee who is injured on the job.

However, because of rapidly rising premiums and the cost of medical bills in this current economic recession, many employers are skimping on the insurance coverage. Some are not maintaining their policies and therefore, do not have the funds to take care of their injured or ill employees.

One of the reasons that insurance premiums are soaring, however, is because of this fraud. In essence, it is a cycle. Therefore, the grant was given to the counties in California, because this area, especially, was struggling with fraud. The hope is that by cracking down on the businesses that commit fraud, the premiums will go down for all area employers.